YTL Cement acquires bigger stake in Perak-Hanjoong

08 November 2004

YTL Cement Bhd is acquiring an additional 32.74 per cent stake in Perak-Hanjoong Simen Sdn Bhd for a total cash consideration of RM109.7 million from Danaharta Managers Sdn Bhd. This is on top of the sale and purchase agreement it signed with Doosan Heavy Industries & Construction Co Ltd (DHI) of South Korea last July to acquire a 32.10 per cent stake in Perak-Hanjoong for a total cash consideration of RM75.3m. Upon completion of these acquisitions, Perak-Hanjoong will become a 64.84 per cent subsidiary of YTL Cement. Following this, YTL Cement will be obliged to undertake a mandatory takeoveroffer to acquire the remaining shares in Perak-Hanjoong it does not already own upon completion of the acquisitions. YTL Cement managing director Tan Sri Francis Yeoh Sock Ping said this will enable YTL Cement to consolidate the earnings and control the management and operations of Perak-Hanjoong (reports The Business Times, Malaysia).

"These acquisitions will enable YTL Cement to expand our presence nationwide as well as augment the group’s access to new markets regionally. "The grouphas capitalised on the efficiency of its logistics and distribution networks and the quality of its products to build up a strong and loyal customerbase, and sees a solid opportunity to expand this blueprint to include new acquisitions. "The addition of Perak-Hanjoong to the group is expected tocomplement our core business activities and consolidate the YTL Cement group’s position in the cement market. "We remain optimistic about theprospects of the cement industry, both in the immediate and long-term future," Yeoh said in a statement released in Kuala Lumpur.

The proposed acquisitions are a natural extension of YTL Cement’s development and expansion process, well in line with its policy of pursuing viable opportunities as they arise, to enhance its operations in niche markets.

The investment in Perak- Hanjoong is an opportunity to acquire an operating asset that has garnered substantial market share in a competitive industry, thereby enabling YTL Cement to further develop and expand its presence and market share in the cement industry, Yeoh said.

Perak-Hanjoong is the second-largest integrated cement producer in the country with 16 per cent share of the domestic cement and clinker market. The company, which operates two plants in Padang Rengas, Perak, has the capacity to produce 3Mt of clinker and 3.4Mta of cement for both the localand export markets. The company also has a cement depot and packing plant in Batu Caves, Selangor, with an annual capacity of 600,000t Its products are marketed under the trade name, "Camel".

YTL Cement is also one of the nation’s largest producers of ready-mix concrete. It operates cement and slag grinding facilities in key locations, Westport,Port Klang and Pasir Gudang, Johor. The company also owns 100 per cent of Pahang Cement Sdn Bhd, the only integrated cement plant in the eastern corridor of Peninsular Malaysia.